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Big companies turn their backs on RBS and Lloyds

RBS made new loans of £16.7 billion to mid-size and large companies in the first halfCarl Court/AFP/Getty Images

Companies are cutting their business with the taxpayer-owned lenders Royal Bank of Scotland and Lloyds amid fears that the cost of borrowing will rise after the recent ratings downgrade by Moody’s.

The Association of Corporate Treasurers told MPs yesterday that corporate borrowers had already begun talking to rival overseas loan providers, including Japanese banks keen to secure a stronger foothold among British businesses.

John Grout, the association’s policy and technical adviser, told the Commons Treasury Select Committee: “A lot of companies are seeking to reduce their dependency for loans on the now two single A [rated] banks.”

He said that big businesses were also reviewing the amount of “ancilliary services” such as derivatives that they buy in from the big banks in order to reduce…